Pernod Ricard is axing Tia Lusso

Pernod Ricard is axing Tia Lusso, the ailing cream liqueur it took on as part of its purchase of Allied Domecq last July.

Launched in 2002 with a £11m investment, the blend of Jamaican coffee, rum and fresh cream was devised to take on stalwart Baileys. At the time, Allied's ambitions for the Tia Maria extension were high, and it was billed as potentially being "the best thing to hit the drinks shelf and bars for years".

Despite expensive advertising and promotion the brand struggled to take hold and has suffered as the cream liqueur sector has fallen into decline, currently down 9% to £96m (AC Nielsen MAT to 25 February 2006).

Unveiling record results for the French drinks giant, Pernod Ricard's UK CEO Jean-Manuel Spriet admitted Tia Lusso had taken Allied's focus away from developing Tia Maria. Spriet said: "Today it doesn't work. Our focus has to be on reinvigorating the mother brand which has credentials to make some inroads."

However, he emphasised the company's commitment to the other brands it had acquired, indicating that it was gearing up to mount a serious challenge to Diageo in the vodka market.

"Stolichnaya is a great opportunity for us to compete in the buoyant vodka category. We're not prepared to let go of Wyborowa vodka, which has really gained in style bars."

Christian Porta, chairman and CEO of Chivas Brothers, said that gin would also be a major battleground, adding: "We have high aspirations for Beefeater. It's the only gin that is made in London."